S&P spurs blame game

Standard & Poor’s delivered an unambiguous message to investors Friday that has serious implications not only for the nation’s economy but also for President Barack Obama, the tea party and anyone else with skin in the 2012 elections:

America’s political system is subprime.

Story Continued Below

Friday’s downgrade seems likely to spur a public backlash against S&P, which now assesses U.S. government debt at less than the top-shelf rating it once gave mortgage-backed securities ahead of the 2008 financial world implosion. But the ratings agency won’t be on the ballot in November 2012.

For everyone who will be, the political stakes of the debt-limit deal – and the deficit-reduction committee it spawned – have been raised exponentially. Rather than forcing conciliation, the analysis spurred many in the political class to dig deeper into the very trenches identified in the report — and to begin trading blame.

The partisan battle lines were quickly drawn: Republicans blamed Obama for reckless overspending, and Democrats said tea party intransigence blocked the sort of “grand bargain” that might have fended off a downgrade. Sen. Jim DeMint (R-S.C.) called on Obama to fire Treasury Secretary Tim Geithner. Pragmatists in Congress took the report as a wake-up call to go for a big deficit-reduction plan, and the fret set crooned in unison, “We told you so.”

Still, it was hard not to read the S&P analysis as a report card on Obama’s oft-repeated pledge to cure Washington’s hyper-partisanship, the promise that won him the White House in 2008.

And much as the credit agency knocked the U.S. credit rating to AA+, it didn’t give passing marks to Obama’s efforts either — producing a soundbite-worthy nugget for any Republican ready to use it: under Obama, we’re not triple-A anymore.

“If Team Obama believes the first downgrade in our history occurring on his watch … is not going to be a boulder in his political backpack, they are delusional,” veteran Republican strategist Mary Matalin told POLITICO Friday night.

GOP presidential contenders wasted no time jumping in. “America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy. Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama,” said former Massachusetts Gov. Mitt Romney.

Added former House speaker Newt Gingrich: “The Obama disaster continues. Highest food stamp level and lowest credit rating in history in the same 24 hours.”